Melting Pot

In the Arizona desert near the Mexican border, an experiment is under way. Hispanic Retail Group (HRG), a company formed by Forest City Enterprises, The Legaspi Co. and Streetscape Equities, is spending $12 million to renovate and reposition the 300,000-square-foot Southgate Mall to cater to Hispanic shoppers.

Southgate is just one of many properties HRG hopes to dress up to attract Hispanic shoppers. The company's goal is to invest $100 million, says Andres Friedman, vice president of Forest City Commercial Development's Western Division.

“Everybody understands the growth and purchasing power of these ethnic groups, but they've not yet figured out how to reach them,” Friedman says.

Overall, African-Americans, Asian-Americans, and Hispanics are migrating from traditionally diverse markets and expanding their combined buying power to more than $1 trillion.

Still, most national retail real estate owners are hesitant to put ethnic retailers in their centers, says Gwen McKenzie, a broker with Sperry Van Ness, a national real estate brokerage firm. There's always the concern that a center might be “too ethnic,” turning off the mainstream shopping population.